Buying or selling a house is daunting enough as it is, without all the jargon. We're here to help. In this blog, we're covering what a memorandum of sale is, at what stage in the sale process it comes in to play, and other useful information around the document.
Jump to the answers to your question:
- What is a memorandum of sale?
- What does a memorandum of sale contain?
- How important is the memorandum of sale?
- Who provides a memorandum of sale?
- When does a memorandum of sale come in to play?
- Estate agent not sending memorandum of sale
- What problems can arise with a memorandum of sale?
- Don't want to risk a chain break?
What is a memorandum of sale?
In simple terms, a memorandum of sale is a document relating to the 'sale agreed' part of purchasing a property. It details the possible buyer's interest in buying the house and the seller's terms of the sale. It's important to note that a memorandum of sale isn't legally binding, instead it's a written confirmation that a price has been agreed and both the buyer and seller want to go through with the sale.
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What does a memorandum of sale contain?
There are a few points that a memorandum of sale should include. The most basic information are the names and contacts of the buyer and seller. Solicitor's details for each side is included, as well as the property's address, tenure, details of lease and any special conditions such as planning restrictions. Other information in a memorandum of sale is the sale price of the property that has been agreed as well as the deposit amount, and which mortgage lender may be being used.
How important is the memorandum of sale?
The memorandum of sale is an important document, it confirms when a property purchase or sale has been agreed by either the buyer or the seller. It's important because at this point it becomes more official, the estate agent will also look to take the house off the market which is important for the buyer as it means you're more likely to get gazumped.
Who provides a memorandum of sale?
When does a memorandum of sale come in to play?
Once an offer is made and accepted, the estate agent drafts the memorandum of sale and sends it through post or email. The conditions of the memorandum are still able to change. Once the memorandum of sale is signed, the buyer may schedule a survey on the property to determine if the price offered is reasonable. Once the buyer is happy, both they and the seller signs a final sales contract. This is legally binding once exchanged by each side's solicitors.
Estate agent not sending memorandum of sale
If you're having trouble with the Estate Agent not sending the memorandum of sale through after a few days of the sale being agreed then it may not a good sign of things to come. It doesn't necessarily mean there is an issue at this point, as it could be one of a few things:
- The seller is slow at getting a solicitor and sending the details across
- The Estate Agents are slow & disorganised
- They seller could be waiting on more viewings before commiting to the sale
If at this point the seller or estate agent is slow it could be a sign of things to come, a painful property purchasing process.
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What problems can arise with a memorandum of sale?
A chain break is one cause of a memorandum of sale to fall through. This is when somewhere in the property chain a party drops out and causes all other parties in the same chain to be at risk of falling apart. This can cause lots of upset and frustration as a buyer's dream home may slip between their fingers. A way to try and decrease the risk of a chain break is to use a decent solicitor, ideally one who is recommended by a friend or family member. Honesty is the best policy, be organised and truthful throughout the buying or selling process. If you're buying, only consider properties which you can afford and get a morgage for. If you're selling, be fair about the condition of the house and also the asking price.
Don't want to risk a chain break?
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